Running under a government mandate, the plant load factor (PLF), or capacity utilisation, of gas-based power plants hit a record 28.7 per cent in May 2024 as India witnessed unprecedented heat waves pushing up the demand for cooling.

Gas-based power plants reported a PLF of 28.7 per cent in May 2024, which is the highest in last five years. Before this, such plants had reported a PLF of 28.9 per cent in May 2020.

Gas-based power generation rose by 83 per cent Y-o-Y and 39 per cent M-o-M to 2.8 billion units (BU) last month. Overall power generation rose by 15 per cent Y-o-Y to 167.55 BU.

Generation by gas-based power plants, with a monitored capacity of almost 25 gigawatts (GW), has been scaling records during the summer peak electricity demand month of May 2024.

For instance, the share of gas-based plants almost doubled to 3.1 per cent in India’s overall generation last month from 1.6 per cent a year-ago, Crisil Market Intelligence & Analytics said.

The world’s fourth largest LNG importer consumed 36.35 million standard cubic meters per day (MSCMD) natural gas in May 2024, up 33 per cent M-o-M and almost 72 per cent Y-o-Y.

Besides, India’s peak power demand (day) hit an all time high of 250 GW on May 30 against the government’s projection of 235 GW. Cumulative electricity generation and consumption during the month grew at a healthy 15 per cent Y-o-Y each.

Gas shines as power demand rises

International Energy Agency projects India’s gas demand to grow 7 per cent Y-o-Y in 2024 calendar year, while Gas Exporting Countries Forum (GCEF) predicts usage to grow at 6 per cent Y-o-Y. Higher gas consumption for power generation is among the reasons fuelling the growth.

In FY24, the PLF of gas-based plants rose to 14.8 per cent from 11.5 per cent in FY23. They produced 31.30 BU against a target of 32 BU, cumulatively consuming 235.78 MSCMD natural gas. India’s peak power demand in 2023 rose to a record 240 GW in September 2023.

Recently, India Ratings & Research (Ind-Ra) projected that gas-based power plants generation could improve intermittently during peak power demand in FY25, led by the stabilisation of gas prices.

Exchange trading

Softening LNG prices and higher requirement of gas by the industrial and power sectors also pushed up the trade on gas exchanges.

Indian Gas Exchange (IGX) traded 4.92 million mBtu (million British thermal units), or around 124 million standard cubic meters (MSCM) gas volume in May, a high of 99 per cent M-o-M and a whopping 480 per cent on an annual basis. 

Trade volumes were high mainly due to an increase in gas demand from gas-based power plants amid hot weather and directives from the government to maximise their output to address the growing demand for electricity.

A total of 96 trades were executed in May 2024, with 32 trades (maximum) executed in Monthly contracts, followed by 29 trades in Daily contracts and 19 trades in Weekly contracts, other contracts were Fortnightly, Weekday & Day-Ahead.

GIXI (Gas Index of India) for May 2024 was ₹851, or $10.2 per mBtu, higher by 13 per cent M-o-M. Prices at Henry Hub (HH) stood at around $2.1 per mBtu, TTF (around $10/mBtu),and West India Marker (WIM) at around $11.3 per mBtu.

Crisil observed that despite power demand reaching an all-time high, prices on Indian Energy Exchange (IEX) remained below ₹5 per kilowatt hour (kWh) in May 2024 as generation increased across fuel categories. 

Mandatory operations of imported coal-based plants along with gas-based plants under Section 11 aided generation, leading to a comfortable supply situation, it added.

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